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One of the pitfalls small business owners fall into is to fail to build a company culture that encourages new ideas and embraces change. One of the pitfalls small business owners fall into is to fail to build a company […]

Research suggests that the first good idea entrepreneurs come up with is always the best. The following sentence has two independent clauses. The author is best known for her novels, she is known for her poems too. Answer: TRUE This […]

At regular intervals, a balance sheet is prepared to show the assets, liabilities, and owners’ equity of the small business. A capital budget reflects a business’s plans for obtaining, replacing, and expanding physical facilities. Answer: True In the context of […]

Consumerism is an organized effort to protect consumers from the undesirable effects of poorly designed products. A recent trend in the operation of a family business is that of retired parents wanting to buy their children’s business. Answer: False A […]

A uniform marketing strategy is beneficial for people of all age groups. Since the financial position of a small business is constantly changing, these changes need not be recorded for further analysis. Answer: False When a business owner buys insurance, […]

Small businesses should never subcontract production to deal with seasonal variations in demand. New developments in computer technology have caused prices to shoot up. Answer: False Specialization is using employees to do the work that they are best suited for. […]

In the SCAMPER tool, “E” stands for: A. entertain. B. eliminate. C. engineer. D. extrapolate. Which of the following is the idea trigger for the magnify cue of the SCAMPER tool? A. The opportunities that come as a result of […]

The attitudes of incompetent relatives working in a family-owned business can be changed by formal or informal education. Insurance companies treat large and small businesses alike. Answer: False A product layout can use the same general-purpose machines and equipment for […]

A buy-sell agreement details the terms by which stockholders can buy out each other’s interest. Personal responsibility is defined as the obligation of a business to follow desirable courses of action in terms of society’s values and objectives. Answer: False […]

Oral reports are the most prevalent type of control used in small firms and provide two-way communication. Communication is the transfer of meaning from one person to another. Answer: True Reintroducing an old product is a good business idea since […]

Small businesses should develop a rating system to select, evaluate, and retain suppliers. The disclosure agreement is a document that provides information on twenty items required by the Federal Trade Commission. Answer: True Product and trademark franchising can be observed […]

An advantage of buying a franchise is that it already has many of the requirements for success. If a manager is a perfectionist, he or she does not need to delegate. Answer: False Niche marketing is the systematic gathering, recording, […]

The Small Business Administration provides direct and guaranteed loans for small firms. Small Business Development Centers provide counseling, training, and technical assistance in small business management. Answer: True Staffing involves compensating employees and providing for their health and safety. Answer: […]

Customers generally view a new company negatively if it imitates established companies and practices in the industry. The SCAMPER tool is based on the work of Alex Osborne. Answer: TRUE The SCAMPER tool is based on the work of Alex […]

Employee benefits are also referred to as fringe benefits. Small businesses should usually leave primary market research to experts. Answer: True In a SWOT analysis, strengths and weaknesses are part of a company’s external environment. Answer: False The owners of […]

According to the Wage and Hour Law, 14 is the minimum working age for most nonfarm jobs. An operating system consists of inputs, processes, and outputs of a small business. Answer: True Equal partnership is advisable in order to facilitate […]

Exporting is the process of purchasing the goods of other nations. Exports largely depend on the ability of importers to sell products to local customers, using local currency. Answer: True Small business owners expect quick and concrete results from their […]

Leading is an important part of managing, but not the whole of it. Receiving the ordered goods and placing them in inventory are the last steps in the purchasing procedure. Answer: True “Off-the-shelf” programs rarely provide cost-effective solutions to small […]

In a corporation, personal property of the owners can be taken to pay the debts of the business. Employees tend to disbelieve what the owner says, regardless of whether it is true or not. Answer: False Smaller firms tend to […]

The relative cost of an advertising media is the relationship between the actual cost of the ad and the number of consumers the message reaches. Stress usually begins when individuals are placed in a work environment that is incompatible with […]

Rebates appeal to many manufacturers because few consumers actually redeem them. One of the unique contributions of small businesses is that they keep larger firms competitive. Answer: True Risk management is the process of increasing productivity by strategically managing the […]

Long-range planning is important for a well-managed small business firm. Today more students think self-employment is a safer haven than working for big corporations. Answer: True If an established business is in a desirable location, it is a good idea […]

Proprietorship is the oldest and most prevalent form of ownership in the United States. Employees in large workplaces have higher job satisfaction than those in smaller firms. Answer: False Preferred stockholders usually retain the right to vote for company directors. […]

A badly managed small business is more liquid than a well-managed company. In a partnership, each partner is responsible for the acts of all the other partners. Answer: True To make a profit, your prices must cover only direct costs […]

A disadvantage of locating a small business in a shopping center is the possibility of policy changes due to change in the center’s owners. Common stockholders have a legally enforceable claim to dividends. Answer: False Working for another company to […]

In a limited partnership, the limited partners manage the business. Coinsurance exempts policyholders from paying the insurance premium. Answer: False Job enrichment emphasizes giving employees greater responsibility and authority over their jobs as the best way to motivate them. Answer: […]

Professional venture capital firms provide more investment capital for small businesses than angel capitalists. Venture capitalists insist on looking at the business plan rather than the executive summary to help them make investment decisions. Answer: False Ordinary bankruptcy occurs when […]

Kiosks are an inexpensive way of setting up a small business. Convenience goods stores are interested in a high flow of customer traffic. Answer: True Government regulations encourage small firms to hire more employees. Answer: False The objective of the […]

The lesser time a small business owner devotes to the business, the more important it is to have capable employees. Small firms are now subject to federal regulation in the same way as their larger competitors. Answer: True Marketing research […]

In a process layout, the facilities are laid out according to the sequence of operations to be performed. The profit margin indicates the relationship between revenues and expenses. Answer: True Business ethics are the standards used to judge the rightness […]

For small business owners, a lack of accurate cost information can foster the illusion of making a greater profit than is really earned. Job splitting occurs when a single full-time job is retained, but its performance is shared by two […]

Researchers in the field of entrepreneurship and small business believe that _____ behavior is the most basic and important entrepreneurial behavior. A. opportunity recognition B. idea networking C. observational D. question-seeking An industrial plant needs to make 100,000 parts per […]

With advances in technology, many tasks in the health care industry are now performed by highly-paid and skilled workers. The amount of inventory after the sale of a finished product should be in balance with customer demand to minimize total […]

In a line organization, staff is hired to advise and perform services for those doing the operations, financing, and selling. Self-insurance is usually impractical for very small businesses. Answer: True Articles of incorporation are the instrument by which a corporation […]

Family-owned businesses run by husband-and-wife teams are referred to as copreneurs. Examples of software include Firefox and Microsoft Windows. Answer: True Borrowing from creditors is divided into current and long-term liabilities. Answer: True Internal audits furnish the owner(s), creditors, potential […]

Saying something is backward compatible means that existing programs will run on the new hardware while still allowing newer software to take full advantage of the recent technological advancements. A buy-sell agreement provides for the corporation to buy back a […]

A target market is a part of the total market toward which promotional efforts are concentrated. Criminal acts have forced not only small but even large businesses into insolvency. Answer: True It is a misconception among small business owners that […]

The most universal form of employee development is on-the-job training or on-the-job learning. With each delegation, the authority needed to carry out the task must be awarded. Answer: True Expenses, such as depreciation on buildings are also known as variable […]

Using internal sources for recruitment reduces a company’s stability. Small business owners need not absorb the losses of the firm. Answer: False Right-to-work laws define the areas in which an employer has the right to act freely as an employer, […]

Online marketing is not a realistic option for small businesses because customers hesitate to use credit cards over the Internet. Commissions are given to employees as a reward on special occasions. Answer: False Small firms generate most new private employment. […]

The marketing concept emphasizes that the survival of any business depends on providing service. Profits are not necessarily in the form of cash. Answer: True Most small businesses use advertising agencies to develop their ad programs. Answer: False The primary […]

Incompetent family members working in a family-owned business may be handled by placing them in jobs which involve frequent interaction with other employees. Employee performance is a product of the employee’s ability to do the job and the application of […]

When a person happens to be at the right place at the right time resulting in a successful business idea, which of the following would be considered to be the factor that led to the business idea? A. Family and […]

Which of the following sentences has a dangling/misplaced modifier? A. Denver served pie to his guests on paper plates. B. We have compiled a list of likely prospects. C. Havent we been here before? D. Our house is old, and […]

Which of the following sentences is an example of mixed construction? A. Students should choose their majors after carefully considering their areas of interest. B. The team and the cheerleaders are on the field. C. The customer is allowed to […]

Which of the following questions in a typical I2P analysis provides information on competing products? A. How would you define the best initial set of customers? B. What is your product or idea? C. Can you develop IP protection for […]

At times of great change, people become more willing to try extreme new ideas. Manufacturing now constitutes the largest economic sector in postindustrial societies. Answer: FALSE Operations management is the set of activities that creates value in the form of […]

According to the Panel Study of Entrepreneurial Dynamics, the business idea and the decision to start a business were simultaneous for a majority of entrepreneurs. With the many sales and service businesses built using the Internet, a low-cost, low-risk approach […]

A person or organization offering the rights to use a particular piece of intellectual property is referred to as the: A. bailor. B. franchisor. C. licensor. D. licensee. According to Graham Wallas description of the creative process, ideas begin to […]

If a company turns its inventory over too slowly, it is most likely to be keeping obsolete or deteriorating goods. Objectives are the goals that give shorter-term direction to the business and serve as benchmarks for measuring performance. Answer: True […]

Bankruptcy is the inability to get funds to start a small business. A franchisee owns the franchise’s name and distinctive elements and licenses others to sell its products. Answer: False Preferred stockholders give up their right to receive profits in […]

The current ratio shows how easily a company can pay its current obligations. Many applicants are eliminated at the preliminary screening stage for reasons such as inappropriate dress, attitude, education, or experience. Answer: True In the context of small businesses, […]

Reengineering is the fundamental redesign of a business, often resulting in reduction in size and markets. All U.S. laws affecting businesses are based on the federal or a state constitution. Answer: True Lack of an established product line does not […]

Only large firms can export successfully. An extended-coverage endorsement multiplies the liability of small businesses. Answer: False Defective code and partial testing often results in bugs. Answer: True The traditional form of the corporation is called a C corporation. Answer: […]

Nowadays, smaller firms are exempt from many federal regulations and even some state and local ones. A website’s context focuses on how a site is designed and captures its aesthetic and functional look-and-feel. Answer: True Test marketing a product is […]

A cooperative is a business owned by two or more persons who have unlimited liability for its debt and obligations. When success leads a family-owned business into the second generation, younger relatives begin to lose interest in job titles. Answer: […]

Premiums for product liability coverage have been declining steadily over the last several years. A corporation is considered by law to be a unique entity, separate and apart from those who own it. Answer: True In the context of small […]

Deferred profit-sharing plans may be used to placate dissatisfied family members in a family-owned business – if deserved. One of the first things one should do when forming a business is to retain a competent lawyer. Answer: True Most small […]

If a business is to be organized and run by more than one person, preparing the business plan should be a team effort. People who start a small business usually seek outside funding before using their own funds. Answer: False […]

Debt financing comes from lenders who will be repaid at a specified interest rate within an agreed-on time span. Just-in-time delivery increases inventory costs. Answer: False If a business has an operating history, its future needs can be estimated with […]

Setting up the human resource management (HRM) objectives of a company is an example of an activity for strategic planning. A family limited partnership resembles a will and contains instructions for managing personal assets. Answer: False Counseling is not needed […]

One’s personal ethic is one’s own belief system. Issuing purchase orders creates legal records of purchase. Answer: True The Service Corps of Retired Executives is sponsored by the Minority Business Development Agency. Answer: False Small businesses must strive for low […]

Small firms use debt financing because interest payments are tax-deductible expenses. Performance standards tell employees in advance what level of performance is expected of them. Answer: True Key person insurance insures the lives of important employees. Answer: True The U.S. […]

In a small family business, management succession planning can start late. In a well-managed small business, the balance sheet is not as important to the owner as the income statement. Answer: False Specialty goods are bought infrequently, often at exclusive […]

Limited-liability companies are permissible only in a few states in the U.S. Due to their inexperience, children must be excluded when making important decisions and setting goals for a family-owned business. Answer: False Long-term debt secured by real estate property […]

A business plan is a tool for attracting people and money. Small firms generally should not attempt to be price leaders. Answer: True In the United States, telecommuting leads to reduced stress since the workplace and home become one. Answer: […]

In the context of franchising, a disclosure statement provides demographic information. Small business owners receive income from profits in the form of an increase in their share of the business through an increase in retained earnings. Answer: True The growth […]

“S” in the creativity tool SCAMPER stands for summarize. Correlation is one of the four stages in the creative process. Answer: FALSE The four stages of the creative process are preparation, incubation, illumination, and verification. To write economically, you should […]

Sandra has a product idea. She has researched about all the competing products and the companies that produce them. The research helps Sandra to address which of the following aspects of the I2P analysis? A. The market and its size […]

The SCAMPER tool is based on the work of Alex Osborne. In entrepreneurship, every good idea is a viable business opportunity. Answer: FALSE Every good idea is not a viable business opportunity. Research suggests that the first good idea entrepreneurs […]

According to the Panel Study of Entrepreneurial Dynamics, the business idea and the decision to start a business were simultaneous for a majority of entrepreneurs. Productivity is more difficult to improve in the service sector. Answer: TRUE At times of […]

Which of the following sentences avoids the use of redundant words? A. The customer returned back the phone stating trivial reasons. B. We should plan in advance for the future. C. At the present time, we are conducting two surveys. […]